Killing cable TV

By Jaime Weinman - Tuesday, May 7, 2013 at 5:51 PM - 0 Comments

Sophie Giraud/Netflix

Netflix is like a Goliath taking on the other, older Goliaths of media. Though it started in the U.S. as a DVD rental company, it has stuck to founder Reed Hastings’ belief that streaming video is the future. Its expanded investment in that area—including original content such as the series House of Cards—has been amply rewarded. First-quarter revenues were more than $130 million higher this year over last. And when it announced its latest financial data recently, the stock price shot up 24 per cent on the day.

Emboldened by that success, Hastings has taken to declaring that Netflix is about to defeat cable TV. In a letter to investors, he proclaimed that “Internet TV will replace linear TV,” and virtually taunted HBO and other competitors with reminders of Netflix’s advantages: “They have to attract an audience for Sunday at 8 p.m., say. We can be much more flexible.” Hastings even has evidence to back up his belief that Netflix can take on HBO and win: according to the Hollywood Reporter, Netflix now has 29.2 million U.S. subscribers to HBO’s 28.7 million.

What Netflix doesn’t have yet is original content to match the cable giants it derides as outdated. Though House of Cards received some good reviews, Hastings said it had only a “gentle impact” on subscriptions. The service’s newest original, Hemlock Grove, was blasted by the Los Angeles Times as “terrible in ways that mock the meaning of the word.” Netflix is betting a lot on new episodes of Arrested Development, launching in May, but fans shouldn’t expect the epic story arcs of the original version: due in part to scheduling and budget limitations, every episode will focus primarily on only one character.

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The downside of Netflix-exclusive series

By Peter Nowak - Tuesday, April 30, 2013 at 2:44 PM - 0 Comments

Hemlock Grove / Netflix

A few weeks back, I wrote about some of the positive developments coming from the Netflix-inspired binge-TV-watching trend. With a growing number of people delving into multiple episodes of TV shows at once on the video streaming service, the way in which actual series are being made is starting to change.

Other than simply eliminating those “previously on…” recaps that many shows used to waste precious minutes on, some series – especially comedies – are going to have to include more variety to keep viewers interested. Binge viewing may thus lead to fewer one-trick-pony shows, which is probably a good thing.

However, with the lackluster critical reception of Netflix’s latest exclusive series, Hemlock Grove, the downside of this trend is starting to emerge. The biggest problem with producing a show in its entirety up front and then releasing every episode for watching all at once is that there’s no room for it to change or grow according to input from the public.

As The Onion’s AV Club notes in its review of Hemlock Grove, regular new shows have to pass through a number of stages in order to survive a season:

Each episode is dissected by audience and critics alike as soon as it airs, and while that doesn’t prevent bad TV from surviving (or flourishing), it does require a certain level of competence. While occasional flukes slip through, for the most part, a badly paced, clumsily acted, increasingly nonsensical season has plenty of time to die by inches when aired on a regular schedule.

That long-term focus group of critics and viewers can organically lead to change and improvement over time, which is essentially what makes television, you know, television – it’s what separates the medium from movies. While films are inevitably tested by focus groups as well, the nature of the medium is that they are ultimately singular and self-contained visions, whereas television shows are largely evolving as they air. Movies, on the other hand, are one-and-done.

Netflix’s series are therefore more akin to really long movies, rather than TV shows. Yet, movie makers – with the possible exception of Peter Jackson – have over the course of decades settled on somewhere between 90 and 120 minutes as the optimum length for those singular visions. Any longer and audiences either tend to get bored, or start finding more things wrong with what they’re seeing.

In that vein, the first “season” of Hemlock Grove is around 11 hours long. I haven’t seen it yet so I can’t comment on its quality, but it is possible that critics are giving it a tough go mainly because it’s horror, a genre that typically doesn’t do well with professional reviewers. Netflix’s other recently released exclusive series, the political drama House of Cards, did considerably better with critics and, apparently, with audiences as well. Netflix recently attributed a big bump in subscribers to the series.

Yet, according to Netflix spokesman Joris Evers, the company doesn’t test screen its series before releasing them. “We do focus groups, but not to test new shows,” he tells me. “We do use the data we have on what our subs like to watch, from many different channels, to determine whether it would make a good Netflix show.”

This may be another case where the almighty algorithm turns out to be less than capable of delivering the goods. It’s still early in the game, but if Netflix makes more series that get panned, the company may have to revisit the idea of focus groups, or possibly even the idea of releasing every episode at once. There is, after all, a reason why television has evolved the way it has.

NFB to co-launch global Netflix of documentaries

By Jesse Brown - Tuesday, April 30, 2013 at 11:47 AM - 0 Comments

The NFB just gets it.

Today, as the wildly popular Hot Docs festival plays to packed crowds in Toronto, they’ve announced a major new effort: a global subscription-based movie service specializing in “auteur” documentaries, debuting in 2014. No word yet on pricing or who their “prestigious” international partners are, but I’m sold on the idea alone. This is a product strangely absent from the online streaming video marketplace, and it’s awesome to see a Canadian cultural institution seizing that opportunity and leading, instead of waiting to see if some American startup can make a go of it first.

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Netflix offers cash prize to improve its open-source code

By Kate Lunau - Thursday, March 21, 2013 at 11:20 AM - 0 Comments

Gareth Cattermole/Getty Images

When a company wants to improve its product, the normal path might be to hire some new talent and spend a fortune on research and development. Or, it could hold a contest. On March 14, movie streaming service Netflix announced the Netflix Cloud Prize. It’s giving away $100,000 (10 prizes at $10,000 each) to developers who voluntarily build on its open-source code and improve the services it offers over the Internet. Programmers have until Sept. 15 to come up with “something cool,” as the official contest website says.

Today over 33 million people around the world rely on Netflix’s cloud technology; the company based in Los Gatos, Calif., obviously has a lot to gain from improving its services. Holding a contest casts a wide net for talent and attracts attention. And if Netflix, which had a profit of $8 million in its last quarter, achieves everything it’s after—award categories include “best new feature” and “best portability enhancement”—$100,000 seems like a small price to pay.

The television model these days is all about buzz

By macleans.ca - Monday, January 28, 2013 at 1:00 PM - 0 Comments

Photo Illustration by Taylor Shute

Netflix wants House of Cards, its new direct-to-streaming television drama, to get a lot of buzz and positive attention—and that may be more important than how many people actually watch it. The Americanized remake of the classic British miniseries, transplanting the Shakespearian story of a scheming politician to modern-day Washington, is the streaming service’s attempt to compete directly with cable TV services like HBO and Showtime. But unlike those networks, which release ratings information to the public, Netflix plans to keep the viewership numbers for House of Cards to itself after the show premieres on Feb. 1. “Our intention is not to release ratings, and that’s for a very good reason: we don’t have to,” says Kelly Bennett, chief marketing officer of Netflix. “We’ll define the success of these original shows in our own way.”

It could be the culmination of a trend that’s been building in TV for a long time: the shows that survive aren’t necessarily the ones that get the most viewers. They’re the ones that get people talking—even if, in this case, it’s only talking about the network’s refusal to release ratings.–

Not that networks have given up on ratings, especially the ones that still depend on ratings to sell advertising time. John Landgraf, head of the FX Network, told the Television Association that ratings “keep you honest.” Without them, he asked, “how will you determine whether something is a hit?” Dervla Kelly, senior director of corporate communications and network publicity for Shaw Media, adds, “You can have a lot of buzz about a show because it’s controversial or whatever, but there’s got to be some correlation with viewers.” But the strategy some networks already follow isn’t that different from Netflix’s: though they release ratings, that’s not the decisive factor in whether a show gets picked up. HBO’s Girls, which won the Golden Globe awards for best comedy and best actress, is in no danger of cancellation even though only 866,000 people watched the season premiere—a number that wouldn’t even be high for a Canadian show. Continue…

Netflix’s stellar 4th-quarter propels stock to biggest 1-day gain in company’s history

By The Associated Press - Thursday, January 24, 2013 at 10:10 PM - 0 Comments

SAN FRANCISCO – Netflix’s rollercoaster ride on Wall Street surged to new heights Thursday.

The company’s stock climbed $43.60 to close at $146.86 as investors celebrated a fourth-quarter earnings report highlighted by accelerated growth in Netflix’s Internet video service.

The 42 per cent increase in Netflix’s market value marked the stock’s biggest single-day gain since Netflix went public more than a decade ago when investors were still shunning Internet businesses in the wake of the dot-com bust.

Most investors were spurning Netflix again less than five months ago when billionaire Carl Icahn decided to go against the grain and buy 5.54 million shares to secure a nearly 10 per cent stake in the company. Icahn’s original $324 million investment in Netflix has already more than doubled to $814 million.

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Who really runs Netflix?

By Jaime Weinman - Tuesday, January 8, 2013 at 11:19 AM - 0 Comments

Amazon isn’t just the world’s biggest online retailer, one of its fastest-growing businesses lately is managing web storage for major online firms like Netflix. A lot of Netflix customers found that out the hard way on Christmas Eve, when Amazon Web Services (AWS) crashed, blacking out Netflix service for millions of Canadians and Americans at a peak time. Only a few weeks earlier, Netflix’s CEO Reed Hastings said he hoped to have Netflix entirely hosted on Amazon by the end of next year. Despite the glitch, he has made no move to end the relationship, and Amazon’s revenue from AWS—which, according to analysts, could soon be as much as $3 billion a year—seems safe. But people did notice that Amazon’s own rival service, Amazon Prime, was unaffected by the outage. Maybe it’s not a great idea to allow your biggest competitor to have so much power over your business.

Is Nintendo innovating downwards for Canada?

By Jesse Brown - Wednesday, November 28, 2012 at 5:03 PM - 0 Comments

Perhaps for the first time ever, Canadians will have first and exclusive access to a hot new piece of technology. On Dec. 7, the Nintendo Wii Mini will be on sale in Canada, and only in Canada.

Just what is going on here?

Wired breaks it down to two possible scenarios:

1) In the U.S., the original Wii is already on sale for as little as $130 with bundled games, and it still sells briskly. A $99 Wii Mini, which lacks Internet connectivity, presents no particular bargain to American consumers. But in Canada, you’ll have trouble finding an original Wii for less than $150, so the Mini is a good deal.

2) In the U.S., 25% of Netflix subscribers use their Wiis to stream video onto their TVs. There are tons of dedicated gadgets that’ll sling the Internet over to your TV screen, but most of them start at $100. Throwing this capability onto a console is a major value-add for Americans. Not so much for Canadians, because Netflix isn’t nearly as popular here. That’s because the Netflix library is much smaller in Canada and because our ISPs tax us with crazy fees when we burst through our miserly bandwidth caps, resulting in a true cost for HD Netflix that’s well over the $7.99 monthly subscription fee.

So: maybe we’re a good first market for a cheap-o Wii because we inexplicably pay higher prices than Americans for the same products with our more valuable dollars. Or, maybe we’re a good market because of our lousy Internet service. Either way, there’s nothing here to be proud of.

I’ll throw a third possibility into the mix, which is just as depressing:

Consumer electronics are settling down from a cycle of rapid innovation to one of global market exploitation. Tablets, smart phones and motion detecting game consoles will increasingly be offered in stripped down, bare-bones forms to 2nd world markets–places where people can’t afford the slickest new iPad, and where they lack the telecom infrastructure and content licensing to make full use of such gadgets if they did.

Maybe Nintendo is offering the Wii Mini to Canada first because we present a low-risk test-market for such releases. Instead of being, as we’ve dreamed, the testing ground for the world’s hottest new innovations, maybe Canadians will become the industry’s downmarket guinea pigs.

Follow Jesse on Twitter @JesseBrown

A fix for Netflix

By Jaime J. Weinman - Wednesday, November 21, 2012 at 8:30 AM - 0 Comments

Gareth Cattermole/GETTY IMAGES

Is Netflix in trouble? Carl Icahn doesn’t think so, or if it is, he thinks it can be sold for a lot of money before the trouble comes. Icahn, a veteran investor with a reputation as a corporate raider, picked Halloween as an appropriate time to announce he had purchased up to 10 per cent of the shares in the video rental and streaming company, and that he had big plans for it. Netflix, he explained, has “significant strategic value for a variety of significantly larger companies.” Its share price rose on the announcement and the implication that Icahn might engineer the company’s sale. Observers theorized about potential buyers—Amazon, Microsoft, Google—but it’s by no means a sure thing that such a sale will happen—or even that Netflix has enough that’s worth buying.

Netflix’s problems have been subjected to much publicity since last year, when the company announced and then withdrew a plan to phase out the DVD mail-order rental service it began with. Since then, its stock has dropped precipitously (from a high of $295 to $78) and its business model has been questioned. But there’s one thing Netflix still has that few other video companies can match—a huge, engaged subscriber base that practically dominates not only the streaming business, but the entire Internet. According to a report last week by the Canadian Internet company Sandvine, Netflix accounts for 33 per cent of traffic during peak hours in the U.S., and reports have shown it doing even better in Canada. Other streaming services simply can’t compete. Amazon, which is building up a streaming service that hopes to rival Netflix, currently has less than two per cent of the business. Continue…

Econowatch

By Colin Campbell - Wednesday, November 14, 2012 at 8:10 AM - 0 Comments

Whatever faith there was left in the Canadian economic miracle, it is fast eroding. Everyone from bank economists to the parliamentary budget officer to the International Monetary Fund is cutting growth estimates. Last week’s report that GDP shrank in August by 0.1 per cent puts the annual growth rate somewhere below two per cent. The results are much the same in the U.S., where growth was two per cent last quarter, up from 1.3 per cent.

Diehard optimists will say any growth is good growth. But today’s climate is starting to feel suspiciously like a recession again.

In the U.S., recent growth has been attributed to a blip in government defence spending. Business investment hasn’t been as weak since 2009. In Canada, growth hangs on the prospect that manufacturing and mining will pick up steam again. How realistic is that? With 10 of 18 industries showing declining output in August, the GDP drop “was no fluke,” said Bank of Montreal chief economist Douglas Porter in a note. “The main message here is that the economy is struggling to churn out any growth whatsoever.” Continue…

Canada’s (almost) ‘third-world’ Internet access

By Peter Nowak - Tuesday, September 18, 2012 at 9:00 AM - 0 Comments

Netflix Chief Executive Officer Reed Hastings. (Mike Cassese/Reuters)

I don’t know about you, but every time I exceed my monthly Internet limit and get a hefty bill, I feel like my human rights are being violated.

On Wednesday, Netflix chief content officer Ted Sarandos was talking about Canadian Internet providers and the low monthly usage limits they give customers at the Merrill Lynch Media, Communications & Entertainment conference in Los Angeles. Here’s how he responded when asked if Netflix’s mediocre content offering in Canada was limiting the company’s growth here:

Viewing hours are almost… are very similar [in Canada] to the US. The problem in Canada is not content, the problem in Canada, which is one of our strongest markets, is they have almost third world access to the internet. Not because it’s constrained for any reason except for money. They have very low datacaps with all the broadband providers in Canada and they charge an enormous amount if you go over your broadband cap. It made us be much more innovative about compression and delivery technology so we are less broadband consumptive in Canada… It’s almost a human rights violation what they charge for internet access in Canada.

The comments took me aback when I first read them. I’m usually the first in line to point out Canada’s broadband shortcomings, but Sarandos seemed to be taking it over the top. Human rights violations? Come on. Perhaps Netflix executives should do some time in Guantanamo or try out some water boarding before they throw such accusations around.

Is expensive Internet a bad thing? Absolutely. Is it a human rights violation. Not really.

And yes, Netflix’s Canadian offerings are quite crappy. Amazingly, that hasn’t stopped the service from growing quickly here. At least 10 per cent of Canadians are subscribing while one analyst believes that number to be closer to 17 per cent.

Hyperbole aside, I wondered if there was anything to Sarandos’ comments, particularly in regards to “third-world” Internet access. I figured I’d check the numbers again.

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Bell pitches Astral deal as key to take on Netflix, Apple, Google

By LuAnn LaSalle, The Canadian Press - Tuesday, September 11, 2012 at 7:49 AM - 0 Comments

Bell Canada Enterprises (BCE) president and chief executive officer George Cope (left) and Ian Greenberg (right), president and chief executive officer of Astral Media Inc. (Christinne Muschi/Reuters)

MONTREAL – Bell will launch a “made-in-Canada” competitor to Netflix and other big U.S. online TV and entertainment providers, CEO George Cope said Monday as part of his pitch for the company’s $3.4-billion acquisition of Astral Media.

The service would be available on demand on any device, and showcase Canadian and international movies from Astral’s pay TV services, such as HBO Canada and The Movie Network, as well as news, sports and entertainment content from Bell Media.

“(It’s) a made-in-Canada service — available in English and French everywhere we have rights — to all Canadians through the cable, satellite or IPTV provider of their choice,” Cope told a CRTC hearing into the acquisition.

More than 10 per cent of Canadians now subscribe to Netflix, which accounts for more than 11 million hours of TV viewing per week, Cope said.

“The Canadian system needs companies with the scale to compete against foreign content companies like Netflix, Apple, Google and Amazon,” he said.

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The party’s over: Why the Internet might mean lower salaries for TV stars

By Peter Nowak - Monday, September 3, 2012 at 10:53 AM - 0 Comments

(AP Photo/ Fox Broadcasting,Isabella Vosmikova)

According to GigaOm, the return of Arrested Development could change how television is made. The cult comedy, if you hadn’t heard, is being resurrected for a fourth season and will be shown exclusively on Netflix.

The subscription video streaming service, believing the revived show will serve as a major magnet for new subscribers, reportedly outbid a number of other big players for the rights to it, including pay TV provider Showtime. If the gamble pays off for Netflix, “it’ll legitimize a whole new distribution platform and business model,” according to GigaOm’s story.

A lot of people are hoping this does indeed happen. With cable prices climbing through the roof, consumers are dying for an alternative (and legal) way of getting access to their favourite shows. Pay-per-download services such as iTunes are great, but so far they’ve simply been a complement to the existing system. Netflix’s scheme is an effort to introduce entirely new production and distribution options for TV show creators, which could ultimately benefit viewers.

What struck me about the whole situation is just how expensive many TV shows are. While we don’t know how much Arrested Development will cost to make, we do know the budgets for shows such as Breaking Bad and Fringe are around $3 million to $4 million per episode. More elaborate series set in fantasy worlds, like Game of Thrones for example, cost upward of $6 million.

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Cord-cutting is no myth

By Jesse Brown - Thursday, August 9, 2012 at 12:36 PM - 0 Comments

(Getty Images)

Some figures released by Reuters last week show that Pay TV is in trouble. In the U.S., where the economy is bad and Netflix is good, 400,000 homes have dropped cable in the past seven months. It’s about time.

The more you think about how the cable television business works, the weirder it seems. It makes sense for some people, who like having dozens of channels to flip through. Other people just want to watch things, like hockey or Game of Thrones.  But you can’t buy access to hockey or Game of Thrones.  Instead you have to buy ongoing access to dozens of channels of round-the-clock programming that you may have no interest in.  Imagine if in order to get your hands on a copy of the Steve Jobs biography, you had to buy a year-long subscription to something called “books” and then upgrade to “premium books”.  Then, you couldn’t just pick the Jobs book, but would be forced instead to choose an entire section called “technology books”.  You might have to bundle it with a few other “premium” sections.  We wouldn’t accept those terms with any other kind of content, but we accept it with cable, mostly just because it’s always been that way.

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The DVD is hardly dying

By Jaime Weinman - Wednesday, May 9, 2012 at 11:32 AM - 0 Comments

Richard Levine/Alamy/Get Stock

DVDs should be over by now. Jason Ropell, vice-president of content for Netflix, says it’s “incontrovertible” that the future of video consumption will be Internet streaming on demand. So why is it that some of the biggest players in home video today are DVD rental kiosks like Redbox, the U.S. rental giant, or Movie Magic and zip.ca, whose machines rent out DVDs to people in supermarkets and drugstores across Canada? Redbox alone has close to 30 million active customers using its DVD service.

The collapse of DVDs was real enough when it came to buying those little discs. The DVD boom of the last decade when, Ropell says, “you’d walk into people’s houses and they’d have a whole bookshelf filled with DVDs with the spines out, like books,” ended long ago. Brahm Eiley, from the media consulting company Convergence Consulting, says sales have been in decline since 2006.

But just because people don’t want to buy DVDs doesn’t mean they don’t want them. When Netflix tried to spin off its U.S. DVD rental business into a separate subscription service, Qwikster, it was hit with so many customer complaints that it had to back down. Even Ropell admits that some customers just don’t want to give up on the physical disc: “There are people who say, ‘I just like seeing the DVD show up in the mail.’ That’s not a logic-driven preference.” Redbox has discovered that if you put DVD rentals in easy-to-reach places and charge a low price for them ($1 per rental in the U.S.), people will keep on renting them and bringing them back. According to a report in the Los Angeles Times Redbox boasts that its kiosks are a five-minute drive or less from 68 per cent of Americans, and it seems that many people still find a five-minute drive more convenient than loading up a movie online.

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Hulu and Netflix launch original Web programming

By Jaime Weinman - Tuesday, February 28, 2012 at 8:00 AM - 0 Comments

Evan Agostini/AP

Clearly there aren’t enough videos on the Internet. In February, the streaming giants Hulu and Netflix branched into original programming, with Hulu launching the comedy Battleground a week after Netflix unveiled its drama Lilyhammer. Despite their proclamations that this is the first step toward replacing regular TV, both shows reflect just how little money the companies are willing or able to invest: Lilyhammer takes place in Norway so that Norwegian television can pick up a lot of the tab, while Battleground creator J.D. Walsh joked, “Wait, other shows have a writers’s room?” to TV Guide. But with TV content less readily available to Web services, this may be the first step toward planning for the future: like cable companies, the Web firms realize that original content is a more durable investment than reruns. Of course, they might make more money if they’d make Hulu available in Canada.

Netflix for toys: Parents reclaim the living room

By Davide Berretta - Thursday, November 17, 2011 at 10:13 AM - 3 Comments

zsoltika/Flickr

Nikki Pope says she came up with the idea after spending time with her 11 brothers and sisters’ families. She couldn’t help but notice “the huge buildup in everyone’s houses of toys that the kids were no longer playing with, because they were growing so quickly,” she said.

The idea was to start Toygaroo, a toy rental subscription company that works pretty much like Netflix. Instead of creating a movie queue, parents select a number of toys online, along with a subscription plan, and Toygaroo delivers a box containing, for example, four sanitized toys once a month for about US$35.

If that sounds a bit pricey, there’s also Colorado-based BabyPlays, which offers slightly cheaper subscription rates.

In the States, similar companies renting baby clothes and children’s books are also taking off, as online services penetrate deeper and deeper into the lucrative children market. But the Netflix-for-toddlers model may soon be coming north of the border as well.

Pope said she is seeing a large number of inquiries from Canadian parents, enough to warrant an expansion to Canada, perhaps as early as 2012. And Canadian investors are already pouring money into it. When Toygaroo was featured in a startup reality show last March, it raised US$200,000 in investment, including from Canadian mogul Kevin O’Leary.

In the meantime, two Canadian moms who have been renting toys online for over a year, are also getting ready to offer the subscription option. Operating the self-funded Toys Trunk out of Milton, Ontario, Carolina Rey and Katia Parada rent individual toys, such as the “bilingual learning table” and  “jump smart trampoline” for prices mostly hovering around $7 for two weeks and $10 for four weeks.

Rey, a former industrial engineer with two children, says Toys Trunk wants to go the way of Toygaroo and Babyplays soon, but data on their 300 customers tells them most parents want a quicker turnaround than those offered down south. “The funny thing is that we noticed that our moms like to change the toys every two weeks,” says Rey. Especially in the case of city dwellers, she says, certain toys are so large that, “people.. want to try them and take them home but they take up so much room so they just want them for a couple of weeks.”

For now, Toys Trunk is serving Milton, Oakville, Georgetown, Mississauga, Campbellville and Burlington. “The dream,” says Rey, “is to have it national.”

You can follow Davide Berretta on twitter at http://twitter.com/#!/daveeday

YouTube on TV

By Erica Alini - Tuesday, September 27, 2011 at 9:05 AM - 1 Comment

People have been debating the value of YouTube for years. Some predicted Google wasted billions on something that could never make money. If recent rumours are true, the naysayers may soon be eating their words. The search-engine behemoth has apparently stepped up its efforts to deliver an alternative to cable television. The company is competing against Amazon, Yahoo and Dish Network to acquire Hulu, the online video site owned by Walt Disney, News Corp. and NBC Universal. Google’s initial offer far surpassed those of the other bidders, according to AllThingsD, a technology news website. This could be part of Google’s strategy for acquiring original video content to upload to YouTube, speculated Business Insider, a business blog, which also quoted two anonymous industry sources saying the tech giant is spending as much as $500 million shopping around for premium titles to boost its online video offering. Google also recently bought Motorola Mobility Holdings, which, among other things, makes cable set-top boxes, devices that allow users to access the Web via TV sets.

It’s all proof that the technology giant is gearing up to battle rivals like Netflix and Apple in the race to reinvent television. Its most formidable weapon, industry watchers agree, is YouTube’s unrivalled popularity.

The rising price of DVDs

By Jaime Weinman - Thursday, July 28, 2011 at 10:00 AM - 0 Comments

Has Netflix declared war on physical media? The movie rental behemoth announced last week that instead of giving its U.S. customers both DVD rentals and unlimited online streaming for $10 a month, it will be offering streaming and DVDs for $7.99 each—a 60 per cent price increase for customers who want to keep both services.

This price hike could help wean customers off DVDs and get them to embrace a streaming-only service, which is already the only option the company provides in Canada. Dan Primack of Fortune explained that Netflix last year “spent between $500 million and $600 million on DVD postage,” and the company’s future business strategy mostly depends on avoiding the mail.

So the people who still want to rent physical media will have to pay a lot of extra money for it, or else switch to the new digital era. There’s just one problem, though: even in America, where Netflix streams considerably more content than it does in Canada, most movies and TV shows are not available outside of the DVD format. Unless studios start licensing more of their content to Netflix, we could be looking at a future where customers have to choose between a big snail-mail selection and a tiny online one.

A Canada without YouTube? It could happen.

By Peter Nowak - Friday, July 15, 2011 at 3:00 PM - 42 Comments

Photo by jonsson/Flickr

Here’s an interesting if somewhat disturbing thought: can you picture a world without YouTube? Or more specifically, a country without YouTube?

It seems improbable, almost impossible, but it’s entirely conceivable if the CRTC loses its collective mind and decides to regulate such “over-the-top” Internet services in Canada.

The regulator, answering to cajoling from traditional broadcasters, has now concluded its “fact-finding mission” on whether YouTube, Netflix and other OTT services should have Canadian content rules foisted on to them. At some point, it will decide on whether to proceed with a new, full hearing, or whether it will just drop the issue, at least for now.

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Prepare for TV chaos

By Chris Sorensen - Tuesday, June 7, 2011 at 10:15 AM - 4 Comments

Mario Tama/Getty Images

A stock analyst once called Reed Hastings’s company, Netflix Inc., “a worthless piece of crap with really nice people.” That was six years ago. Hastings and his agreeable team have since helped kneecap video-rental giant Blockbuster by convincing Americans that it was easier to rent DVDs through Netflix’s website, and then have them delivered (and returned, postage paid) through the mail. Now Netflix is in the process of upending the entire television business by using the Internet to stream movies and TV shows directly to people’s computers and big-screen televisions via Web-connected Blu-ray players, Xboxes and other devices. So much for Mr. Nice Guy.

Netflix has so far signed up more than 24 million customers in the United States, rivalling the subscriber base of cable giant Comcast. Hastings expects to add another one million Canadian subscribers by this summer, with each one paying $7.99 a month for unlimited access to Netflix’s ballooning catalogue of digital titles. And the stock price? It’s far from worthless, having surged more than 800 per cent over the past five years—a better performance than even Apple Inc.’s.

Not surprisingly, cable and satellite TV executives are getting nervous—Comcast’s CEO recently derided Netflix as “reruns TV,” referring to its lack of live content. And Hastings isn’t doing much to soothe fears when he describes Netflix’s potential customer base as one that goes well beyond existing cable or satellite subscribers. “One way to think about the upper limit is the number of people who have a mobile phone,” Hastings told Maclean’s. “That’s because they’re people with enough money, and are of the right age to own a device with a screen.”

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Netflix vs. the networks

By Jaime Weinman - Monday, March 28, 2011 at 5:42 PM - 0 Comments

Now that Netflix has driven video rental companies out of business, it’s going after the television networks. The online video-streaming company made a deal last week to produce its first original series, outbidding HBO and AMC for the rights to House of Cards, producer-star Kevin Spacey’s remake of an acclaimed British miniseries. Netflix reportedly won the rights to the show, featuring Spacey as an evil politician, by ordering 26 episodes up front without even making a pilot.

If the show succeeds, it could allow Netflix to displace cable TV: it doesn’t have the operating costs associated with a regular network, and instead of scheduling the show, it will simply release the episodes online, for people to sample whenever they want. Executives at Time-Warner, which owns HBO, were rattled enough that one of them ran to the Los Angeles Times denigrating Netflix’s chances: “It’s hard to see how that kind of economics can fit into a service that charges $8 or $10 a month, because the math doesn’t work.” Even if that’s true, Netflix may have no choice but to press ahead with its efforts; with Amazon and other companies starting their own streaming services, it can’t depend on other people’s movies and shows forever.

Google, Apple, and Netflix: tomorrow's entertainment studios?

By Jesse Brown - Tuesday, March 22, 2011 at 1:55 PM - 4 Comments

David Carr has posted some interesting thoughts on Google’s mission drift: though they’ll deny it ’til sundown, the search giant is slowly but surely getting into the content business.  They’re cutting deals with major league sports and with Hollywood studios. They’re investing millions in celebrity content for Youtube. And last month, they rolled out One Pass, an attempt to wrap a universal payment layer around “pro” publishing content.

Meanwhile, Netflix made headlines last week by trumping the cable TV networks and buying a new David Fincher series (sight unseen) for $100 million.  The news gobsmacked the entertainment industry, who considered Netflix merely a conduit for content, not a producer of it.  But the strategy is nothing new. Continue…

Grading the Internet

By Colin Campbell - Friday, February 4, 2011 at 12:17 PM - 3 Comments

The movie-streaming service Netflix reported last week that it now has 20 million subscribers, up from 12.3 million one year ago. Netflix’s growth has quickly made it a force in the entertainment business, but its increasingly popular service is putting steep demands on the Internet service providers responsible for delivering all those movies to customers’ homes­—and prompting a simmering battle over who should carry the data costs.

Last week, Netflix released a report card ranking ISPs in the U.S. and Canada and their ability to handle Web video offered by the company. Measuring streaming rates in kilobits per second, Netflix ranked Charter and Comcast highest in the U.S. But it was the Canadian providers who stood out, with the top-ranked Shaw and Rogers (which owns Maclean’s) and the third-placed Bell beating out all the American ISPs.

The company says it will offer the reports monthly, keeping tabs on which ISPs remain Netflix-friendly.